Nov 21 2011

Building to last: Why XWiki SAS will remain an independent company

In November 2003, I had just left Nielsen-NetRatings and I started coding XWiki in the sunny south of France, in Valbonne, a beautiful place I highly recommend you to see. 

It has been 8 years now, and looking back, I don't think I fully realized what I was doing when I decided to create something on my own. I actually was just experimenting my product ideas, but soon enough I became interested in starting a company. The company was initially called XPertNet , now XWiki SAS. At the time, I didn't know exactly what type of company this was going to be.

Why build XWiki?

During the past 8 years I've had my small share of roller coaster rides, but through the bumps I learned what I truly wanted to do. I wanted to build a technology company that lasts, a place where we could improve things step by step, an environment where we would enjoy ourselves while building products that are useful to our customers and to the world. The company would put respect for its customers and employees at the center of its values and would stand the test of time.

Interestingly, I did not mention Open-Source in the previous paragraph, not because it's not important to me, but because Open-Source is not an objective in itself. It's a way to achieve many of the above objectives. Open-Source allows us to be useful to a community of people, more successful, and it's a constant reality check when it comes to our relationship with customers and the respect they deserve. Similarly I did not mention "successful" in the above paragraph, because success is a means as well. You need a bit of it if you're going to enjoy yourself and be useful to users, but success, when it's confused with fame instead of the actual product success, is overrated. We truly believe that what counts is what you actually build and that it's better to spend more time improving the products than talking about them.

XWiki didn't raise money, why is it a good thing?

For the past 8 years I've been thinking a lot about how we should proceed to building and growing XWiki and XWiki SAS. I looked for partners in the initial stages, as well as Angel Investors and VCs. I had my previous experiences at Netscape and NetValue as examples of what "startups" were. On one hand I thought investors were what we needed, but on the other hand I was worried about the possible consequences of having investors. The two companies, quite typical for the '"startup" model with investors, have both disappeared now. After two partnership attempts that didn't go through, I partnered with Vincent Massol as well as 10 other XWiki employees. We all invested in ourselves. We also had the advantage of benefiting from the French State Research Funding processes which got us tax cuts and research project fundings which have been of significant help in our growth. In the end, we did not get any Angel Investors or VCs. Although I did a few meetings and presentations I never raised enough interest to get close to a deal and, as Guillaume Lerouge pointed out to me, I didn't do much to make it happen either.

In fact, I was not ready to say what they wanted to hear, which was mostly business oriented and not product or technology related. For investors Open-Source was not a means of respecting customers or being more useful, but a way to grow the business. It was about fast growth and high risk and not about steady but risk-controlled growth. I'm not saying that investors don't care about the product, the service or the customer, but while for Angel Investors it is different, the VC's main responsibility is to look for a high return in 5 to 7 years, if not less. I'll come back in another article on that. I realized that what we were building at XWiki was not consistent with these expectations and that I was not willing to actually turn around the way our company operated in order to get investors.

Luckily, or because of our hard work, XWiki is still here after years of having spent less than what we earned. Year after year our products get better and we are able to convince users and customers to choose our products over solutions provided by much bigger companies than ourselves. We're still a small company with "only" 2M$ annual revenue which means we are limited in our investment capabilities and we have to make choices all the time. But we get a continuous flow of incoming calls from companies that find our products match their needs and our customers recognize the quality of our services. I don't think we can say that we've "made" it, because in technology it's never really "made", but we consider our company "stable". At least we are stable enough to know that we can continue on this path and steadily grow the company with measured risks. In time there is almost no limit to how much we can expand the business. XWiki is in a market that is bigger than what we can imagine ourselves doing (at least from where we stand), so there is no reason not to be able to grow the company.

Staying independent to keep our "freedom"

So we've decided that we don't need anybody besides our employees, our users and customers, that XWiki SAS doesn't need investors and, further more, should not have investors. If we did, we believe there would be very little chances left to achieve our goals. The way a VC-backed company operates leads at best to an IPO with the owners still controlling the majority of the voting power of the company. In very little cases it leads to an IPO with a completely different management team, in other cases the company is acquired, while in most cases it all explodes to pieces. In almost no cases will this lead to a company that can fully retain its "freedom". The exception is about a company a year, and even in this case, the companies are constrained by quarterly announcements of their numbers which add up to the pressure of displaying super growth.

We believe keeping our "freedom" is the best and safest way to achieve our goals, which is why we have decided to keep XWiki SAS independent and not seek outside investment. 

We've also decided that we need to share more information about XWiki SAS, the way we operate now and in the future. We believe this is important for our users, customers and the XWiki Open Source community. We also believe that this will be beneficial for XWiki and XWiki SAS as it will show future XWiki users that they can rely on a sustainable partner when choosing our products. We also want to share our story with other entrepreneurs so they know there's a sustainable alternative to the VC model (which seems to show some slowdown). While the spotlight shines a lot on investment-backed companies which are not yet sustainable , there are many other companies that are much more sustainable out there which you may not have heard about.

In the coming weeks, I'll publish a series of more detailed articles about the "XWiki" story, what we did and how we achieved it. Stay tuned.

XWiki Founder and XWiki SAS CEO